KUALA LUMPUR (Sept 7): UMW Holdings Bhd slipped as much as 30 sen, on the back of a weaker ringgit and lower crude oil prices.

UMW Holdings fell to its lowest so far today at RM7.70. At 12:30pm, the bourse's fourth-largest decliner settled at RM7.75, with 489,200 shares having changed hands.

Shares of UMW Holdings had fallen 29% so far this year, underperforming the FBM KLCI's 10% decline.

UMW Holdings, which distributes Toyota cars in Malaysia, was seen contending with weaker consumer sentiment, amid a depreciating ringgit. “People probably feel the economy is a bit gloomy. Cars and spare parts' prices and import costs will also be higher, with the weakened ringgit,” a remisier told theedgemarkets.com.

The ringgit weakened to 4.3120 against the US dollar today, amid anticipation of US interest rate hikes this year. The ringgit also tracked cheaper oil, which forms a major component of the Malaysian economy and government revenue.

Reuters reported oil prices fell on Monday, as concerns of global oversupply, a firmer dollar and lacklustre U.S. nonfarm payroll data on Friday, weighed on oil markets.

Brent crude for October delivery fell 25 cents to US$49.36 a barrel as of 0419 GMT, after ending the previous session down US$1.07 or 2.1 percent. The European benchmark fell almost 1% last week.

U.S. crude for October delivery, also known as West Texas Intermediate, was down 22 cents at US$45.83, after settling 70 cents down or 1.5% in the previous session.

Cheaper oil does not bode well for UMW Holdings, which also offers oil and gas (O&G) support services.
 
JF Apex Securities Bhd wrote in a recent note that UMW Holdings' O&G division would remain challenging due to a weaker drilling market, as O&G companies lower their budgets.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)